By Justin Andrews, KPIX
SAN FRANCISCO (CBS SF/CNN) — If you haven’t filed your taxes just yet, a recent study shows you’re likely not alone.
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Tax Day is Monday April 18th and a large number of people across California have waited until the last minute to file.
Just how many?
According to a IPX 1031 study, the California ranks fifth on the list of states with the biggest tax procrastinators. San Francisco and San Jose made the list among some of the top procrastination cities.
“I figure as Californians we always kinda delay doing things because we have a lot on our plate, we’re busy people,” said Daniel Delmore.
Delmore admits he typically waits until the very last minute to file his taxes.
“It sucks, you gotta sit there and review and recap all of last year, I have to go through my checking statements, credit card statements, tally all my write-offs,” Delmore says. “It just takes way too much time.”
Financial expert Shibani Joshi agrees.
“There’s no penalty for waiting until the last minute,” Joshi said. “To have California on there really took me by surprise. The anxiety around taxes is real and if you have not filed your taxes, I guess the good news is… You’re not alone, you’ll probably find some friends nearby.
Joshi said another reason people may procrastinate could include worry of not getting much money back or if someone owes taxes.
The study found millennials are the most likely to procrastinate filing taxes compared to other age groups.
“It’s worse this year, last year I think I got it done early March … But this year I’m waiting to the very last minute,” said Delmore.
Joshi says if you don’t have your financial documents ready, an extension is possible.
“If you do need more time, you can always file an extension and you can do that to give you until October to file your taxes.”
So what do you need to know when you sit down this weekend and hammer out your return. Here’s answers to some frequently asked Bay Area questions.
If I do owe money, when is that due?
For most people, you have to pay any remaining 2021 income taxes that you still owe by the April 18 filing deadline, even if you get an automatic six-month extension to file.
What if I don’t pay on time?
You will have to pay even more than you owe, because you’ll be slapped with penalties and interest.
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If you really can’t afford to pay on time, and you have a good reason for why, you can make your case to the IRS by attaching a statement to your return when you file. If the IRS accepts your explanation, it may waive the late payment penalty. At a minimum, you need to show that your failure to pay is not the result of “willful neglect.”
To show that, try to pay what you can when you file, even if it’s not the total balance. If that’s not possible and you’re really behind, you may be able to set up a repayment plan with the IRS.
What if the IRS owes me money?
If you file an accurate return electronically, and are owed a refund, the IRS will likely have that money sent to you or direct deposited into your bank account within 21 days of receiving your return.
You can check the status of where things stand by using the IRS online tool Where’s My Refund?
I was working remotely for much of 2021. Will that affect my taxes?
It depends. If you worked from a state other than the one where your employer is based, you could be subject to the income tax rules of two or more states.
At the very least you’ll likely have to file more than one state tax return for 2021, which will cost you more if you’re paying someone else to prepare your taxes.
And in some instances — primarily involving five states that have so-called convenience rules — you may even be double-taxed on the same income.
I got an IRS letter saying it sent me a stimulus check. Is that reportable and taxable?
The IRS recently mailed Letter 6475 to taxpayers who received a third round stimulus payment, which the agency started sending out in March 2021.
While the payment isn’t taxable, you should report the number from that letter on your 2021 return. The last thing you want is for there to be a discrepancy between the IRS records and what’s on your return. That will cause delays in processing your return and issuing your refund.
And you’ll want to use that number to work out whether the IRS actually owes you more by way of a recovery rebate credit, once you calculate how much more of the stimulus payment you’re due on the basis of your actual 2021 income. Taxpayers who earned less in 2021 than 2020 may be eligible for more money. The same goes for anyone who had a child last year. And for very low-income taxpayers who didn’t receive any payment, filing a return now is your chance to claim it.
I have cryptocurrencies. Do I have to report that?
It depends.
Just buying and holding cryptocurrencies are not taxable events.
But if you sold cryptocurrencies, used them to buy something or were paid in crypto, those are taxable events and must be reported.
Virtual currencies are taxed as property, or as an investment, when you sell them. To make matters more confusing, using them to buy something technically counts as selling. So you will be subject to capital gains tax when you sell them.
If you’re paid in bitcoin or other crypto, on the other hand, that will be treated as taxable income to you. So will income earned from mining or staking.
And starting next year your crypto activities will be subject to third-party reporting — meaning both you and the IRS will get the same tax forms reporting your sales and income.
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Source: sanfrancisco.cbslocal.com.